Borrowing is not bad … as long as you do it wisely. Here we leave 3 basic rules to control debt and prevent them control you:
1. Your debts must be less than 30% of your income
If you plan on purchasing an auto or mortgage loan or use your credit card, make sure that you will ask the amount does not exceed 30% of your income.
2. Allocates an untouchable amount to your debt
When putting together your budget, an untouchable part intended to cover your debts. This will help you have solved the payment since the beginning of the month.
Although you will not remove the debt over the come down gradually, to avoid more interest and have a better credit history.
3. To control the debt, stay calm
People with large debts often lose sometime calm and act desperate to avoid consequences. Common, for example, to request an immediate loan to pay what they owe elsewhere that month.
However, payday loans are very expensive. Another decision by urgency is pawning valuables.
Avoid both and seeking cheaper alternatives, like selling things in your house that you do not need or ask for money from a family trust. A clear mind think of better solutions.
Remember having debt is not bad , but handle them without responsibility and without knowing how much it cost, yes. Before hiring any credit or loan, see how much is the interest rate and the cost of it.